The low-risk alternative for down payments that is paving the way to a sustainable future.
Corporate Startup of the Week
A transaction between two parties should be a fairly straightforward event. You give me something and, in return, I’ll give you something else. This is, most of the time, translated into trading a product or service for a monetary value. The transition usually happens immediately; the buyer walking away with the product and the seller with their money.
However, when the product you’re selling is custom-made and there are high costs involved, you can get into a dilemma: either pay for the costs up-front and trust that your customer will reimburse you once the product is delivered, or ask for a deposit before even starting the process.
This is a game of trust between two parties who have probably never even worked together. On one side, the seller might lose all their money and end up with a tailor-made product that will fit nowhere else. On the other side, the customer might pay a lot of money for something that might never get delivered, in case of the company going bankrupt or other unforeseen events.
That’s where BuyRely found its niche market. Acting as an intermediate between seller and consumer, the startup positions itself as the low-risk alternative for down payments. After a deal is closed, the customer transfers the payment to a locked BuyRely account. This money is only released to the seller once the product has been satisfactorily delivered and installed.
Therefore, suppliers can more quickly reach an agreement with the customer, boosting their chances of securing a deal.
Want 29 more corporate startup stories?
“Trust is the key word at BuyRely, (…) The customer does not have to be concerned that about losing their down payment. For the entrepreneur, this means that the customer can reach an agreement with their customers quickly, which is also evident in the growth in turnover of entrepreneurs who already use BuyRely. We also get to hear from entrepreneurs that they have to pay less for their suppliers, such as importers, thanks to the trust given by BuyRely, which also increases their turnover, enabling them to take on more assignments at the same time and thus enable their business to grow faster. In this way, ING helps small and medium-sized companies.”
– Herman Tange, director of ING Business
The service, which is free for the consumer, is the result from an idea from 3 ING employees: Ernst-Jan Stokvis, Martin Mastbroek and Annelies van Essen. But you need not be an ING customer to use it, as it’s a separate entity working independently from the bank. The concept was first pitched at ING’s 2015 Innovation Bootcamp and was one of three winning ideas out of 1800 worldwide submissions, “graduating” from the program on May 2016.
“It has been amazing to be part of a new organisation. On a personal level, it made us realise that you can do a lot when you get out of your comfort zone. Working out of my comfort zone is where I succeed the best.”
– BuyRely Founders Interview
BuyRely originally intended to target the kitchen sector, but even though consumers were excited about the possibilities, suppliers weren’t so keen on having to wait for the cash flow. So, the team focused on residential solar panels, a large, growing market expected to double in the Netherlands by 2020. They have recently reported to be expanding to the entire construction sector.
The project is still at an early phase, experimenting with different business models and product offerings. For example: even though they focus on a B2C (business to consumer) approach, there are some possible routes to reach a B2B (business to business) audience, such as the white-labelling of the product for larger installer organisations.
It might be too early to tell, but BuyRely is already stirring things up in the solar panel sector, being recommended by the Dutch Consumers Association (Consumentenbond) as a way to avoid deposit risks and featuring in several solar panel installer websites.